Irvine Housing Blog

Home Sales Data thru 6-18-2007

More of the same: lower volume and lower prices.

Pie in the Cobalt Sky ** Update 1 **

This WTF award winner just keeps on getting better. Now the property is now for lease at $25,000 a month! Anybody want to guess what the owner's carrying costs are? Personally, If I were going to spend that kind of money on rent, I would take this beachfront property in Laguna Beach, but that is just me. I don't know... Irvine tract home, beachfront in Laguna Beach... That is a tough choice...

Asking Price: $5,200,000

Purchase Price: $3,458,000

Purchase Date: 7/29/2005

Address: 25 Cobalt Sky, Irvine, CA 92603

Beds: 5
Baths: 5.5
Sq. Ft.: 5,700
Lot Sq. Ft.: 21,000
Year Built: 2005
Stories: 2
Type: Single Family Residence
View: City Lights, Mountain, Panoramic, Park or Green Belt
County: Orange
Neighborhood: Turtle Ridge
$/Sq. Ft.: $912
MLS#: S468569
Status: Active on market
On Redfin: 181 days

From Redfin, "There is no lack of high quality appointments evident as you survey th is gracious home of luxury. Each room opens onto a gorgeous courtyard creating an excellent flow, perfect for entertaining. Richly appointed kitchen & nook complete with elegant cabinets, beautiful center island with top of the line slab granite countertop & state of the art stainless steel appliances. A wine cellar for the connoisseur. Beautiful backyard complete with designer inspired pool & loggia perfect for your parties."

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This property was first profiled at OC Fliptrack, but I wanted to revisit it because it is revealing of the mindset of sellers accustomed to a bull market. First, to put this price in context, lets look at the identical house available from the builder on the same street:

Price: $3,595,000

28 RESERVE
Irvine, CA 92603

Beds: 5
Baths: 5.5
Sq. Ft.: 5,699
Lot Sq. Ft.: 14,441
Year Built: 2007
Stories: 2
Type: Single Family Residence
County: Orange
Neighborhood: Turtle Ridge
$/Sq. Ft.: $631
MLS#: S451762
Status: Active on market
On Redfin: 317 days

Look at these two properties. They are almost identical. What would make one seller believe he could possibly sell his home for $1,700,000 more than an identical home on the same street, particularly when the lower priced home has been on the market for almost a year?

In a bull market, prices rise because bidders constantly raise their offers. Sellers can set a price, even a ridiculous one, and know they will eventually sell because the market will come to them. These are unique properties, so the supply is very limited. This seller has reasoned that the builder will eventually sell their home, then he will have the only property on the street available for sale. Buyers will have to pay his price. This mentality might have been successful in 2004 or 2005, but right now, it makes this guy look like an idiot -- which he is.

The collapse of easy credit financing at 10 times income will stop this sale from ever occurring. Bidders simply will not be able to raise the money to buy this home. Yes, it is possible some very rich individual may simply pay cash for a home like this, but with many great estates to choose from for $5,200,000 why would they buy an Irvine tract home?

This is not exactly the worst place to be trapped by falling housing prices, but the seller should save himself the embarrassment of putting this house for sale at a ridiculous asking price. Maybe now that this post has humiliated him publicly, maybe he will take it off the market -- I doubt it, greed springs eternal.
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Hope springs eternal in the human breast;
Man never Is, but always To be blest:
The soul, uneasy and confin'd from home,
Rests and expatiates in a life to come.

-Alexander Pope,
An Essay on Man, Epistle I, 1733

Need a New Castle? ** Update 1 **

Old Asking Price: $549,000

New Asking Price: $490,000

Purchase Price: $555,000

Purchase Date: 7/19/2006

Address: 609 Newcastle, Irvine, CA 92620

Beds: 2
Baths: 2
Sq. Ft.: 1,260
Year Built: 1998
Stories: 2
Type: Condominium
View: Mountain
County: Orange
Neighborhood: Northwood
$/Sq. Ft.: $436
MLS#: P564715
Status: Active on market
On Redfin: 68 days

From Redfin, "Great Location in Northwood's gated community, Spacious Kitchen with w alk-in pantry, lots of cabinets, Master Bedroom with master bath and walk-in closet, Inside laundry, Private Balcony, Close to schools, park, shops, Community Pool/Spa and much much more!!!" More exclamation points...

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This flipper didn't even bother putting in granite tops...

As you have probably noticed, the low end of the market is showing the most signs of stress. Assuming a 6% commission, this flipper stands to lose $38,940. That's almost $4,000 per month over the 10 months of ownership. Also, it probably won't sell at this price, so the expect that loss to grow.

This poor seller may have to go cry in his beer...

** Update 1 **

With the new, significantly-lowered asking price, this flipper now stands to lose $94,400 after commissions.

Making Hay

Rallies don't last forever, despite what realtors may say. This seller was hoping he was making hay while the sun shines, but he was late to the harvest, and now he is a 2004 rollback.

Asking Price: $599,900

Purchase Price: $600,000

Purchase Date: 6/1/2004

Address: 172 Hayward, Irvine, CA 92602

Beds: 3
Baths: 2
Sq. Ft.: 1,588
Year Built: 2001
Stories: 3
Type: Condominium

County: Orange
Neighborhood: Northpark
$/Sq. Ft.: $378
MLS#: S479574
Status: Active on market
On Redfin: 110 days
Unsold in 90+ days

From Redfin, "IMMACULATE HOME IN GATE GAURDED COMMUNITY OF NORTHPARK. .. SHOWS VERY NICE. .. UPGRADED THROUGHOUT WITH HARDWOOD FLOORS IN LIVING ROOM, KITCHEN AND ALL BEDROOMS. .. THRIRD BEDROOM IS USED AS AN OFFICE WITH ANICE BUILT-INS. .. GOURMET KITCHEN WITH COIAN COUNTERTOP AND FULL BACK SPLASH AND GE APPLIANCES. .. . PLANTATION SHUUTERS, CLOSET ORGANIZERS AND MUCH MUCH MORE. ."

Do realtors have a spell checker? And what is an ANICE?

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I am finding more and more of these 2004 rollbacks. Assuming a 6% commission, and assuming a property that has sat on the market for 110 days sells at its asking price, this seller is going to lose $36,094 on a 2004 purchase. Do you think this person was told, "prices won't crash, they might level out for a while, but they won't actually DROP." Well, this seller seems to be stubbornly holding to the flatline. I have a news flash for them, "Prices do drop."

The Trees are Always Greener

In Irvine, the trees are always greener, and like Lake Wobegon, "the women are strong, the men are good looking, and all the children are above average." After all, everyone wants to live here; which is, of course, why house prices will never go down in Irvine. Except maybe here...

Asking Price: $618,800

Purchase Price: $645,000

Purchase Date: 4/25/2005

Address: 4661 Green Tree Lane, Irvine, CA 92612

Beds: 3
Baths: 1.75
Sq. Ft.: 1,560
Year Built: 1969
Stories: 1
Type: Condominium

View: Other
County: Orange
Neighborhood: University Park
$/Sq. Ft.: $397
MLS#: S479186
Status: Active on market
On Redfin: 105 days
Unsold in 90+ days

On Redfin, "UNBELIVERABLE PRICE , VIEW OF GREENBELT , 3 BEDROOM 1.75 BATH OPEN CATHERAL CEILING LIVING ROOM W/ INVITED FIREPLACE, FORMAL DINING ROOM, KITCHEN WITH VIEW OF YARD AND GREENBELT. MASTER BEDROOM WITH PRIVATE PATIO. U. C. IRVINE, UNIVERSITY HIGH SCHOOL ARE CLOSED BY. THIS HOME WILL BE SOLD IN 'AS IS' CONDITIONS. CALL L/A FIRST BEFORE SHOWING. THANK YOU FOR SHOWING."

""UNBELIVERABLE" I don't know if I believer it either. What is an INVITED fireplace? Did the fireplace seek permission to come visit? Is it staying? Nice to know things are CLOSED by. And thank you for the ALL CAPS as it makes the description it so easy to read... not.

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The lack of a second full bathroom is a problem, but there are no other factors working against this place other than the general market environment. This property is in a nice in-tract location very close to the school, the community park, and the large community pool.

This property has been on the market for 105 days at a price lower than its 2005 purchase price. The price will need to come down further to have a sale. If this seller gets their asking price, they will still face a loss of $63,328 assuming a 6% commission. The loss will probably be closer to $100,000.

The rollbacks have clearly gone past 2005, and we are now in 2004 territory. These rollbacks are getting easier to find.

New Mountain High

Now his life is full of wonder but his heart still knows some fear
Of a simple thing he cannot comprehend
Why they try to tear the mountains down to bring in a couple more
More people, more scars upon the land

John Denver -- Rocky Mountain High

Link to YouTube Video

I found a listing with an American Flag to celebrate our nation's birthday:

Asking Price: $1,435,000

Purchase Price: $620,000

Purchase Date: 3/15/2002

Address: 19502 Sierra Nuevo Road, Irvine, CA 92603

Beds: 4
Baths: 2.5
Sq. Ft.: 2,011
Lot Sq. Ft.: 12,000
Year Built: 1971
Stories: 1
Type: Single Family Residence
View: Park or Green Belt
County: Orange
Neighborhood: Turtle Rock
$/Sq. Ft.: $714
MLS#: P585457
Status: Active on market
On Redfin: 1 day
New Listing (24 hours)

From Redfin, "WOW, magnificant dream setting with one of a kind lot. Over 1/4 acre of land in Turtle Rock. Accross from HOA park and pool. All new appliances, beautifully remodeled throughout. New windows and doors. Walk to award winning schools. This kind of house and lot are rarely available. "

Did you see that enormous lot? It was over 1/4 of an acre! WOW! That's an estate, isn't it. magnificant!

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Are you kidding me? We have area comps going for less than 2004 and 2005 prices, but somehow this house has appreciated 131% since 2002. Even by Turtle Rock standards, $714 / SF is ridiculous.

For drinking way too much kool aid, for getting high on greed, and for having the nerve to list at an obscene price, the sellers at 19502 Sierra Nuevo Road win our WTF Award.

Happy Birthday

Happy Birthday America. Yes, I know it is a day early, but I didn't want any of you to miss this listing because you were out enjoying your holiday activities. I would also like to wish this listing a happy birthday. It is more than one year on the market.

Highest Asking Price: $2,100,000

Current Asking Price: $1,980,000

Purchase Price: $742,000

Purchase Date: 11/7/2003

Address: 5512 Sierra Roja Road, Irvine, CA 92603

Beds: 5
Baths: 4
Sq. Ft.: 3,600
Lot Sq. Ft.: 5,833
Year Built: 1970
Stories: 2
Type: Single Family Residence
View: Hills
County: Orange
Neighborhood: Turtle Rock
$/Sq. Ft.: $583
MLS#: S446818
Status: Active on market
On Redfin: 369 days
Unsold in 90+ days

On Redfin, "Custom home rebuilt- High quality building materials include crown mouldings, stone flooring, Dramatic entry, Large Dining Room, gourmet kitchen, walk-in pantry, granite, stainless steel appliances, convection double ovens, stone work, recessed lighting, A/C and heating. Giant Master Bedroom, walk-in closet-fabulous bathroom forever hill view. .award winning schools (university high)NO MELLO ROOS-LOW ASSN $91.00/MO -OWNER ANXIOUS. .JUST COMPLETED"

I'll bet the owner is ANXIOUS. Perhaps they could lower their anxiety by lowering the price a bit more...

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This listing needs to be nominated for the WTF Hall of Fame. I have never seen a listing that left me so perplexed, so speechless that my mind can't even comprehend it...

I am in such shock, I can't even find the energy for a rant...

I sit here staring at the computer, my mouth dropped in disbelief...

I see the asking price; I see the purchase price, and it just does not compute...

O
M
G

Is this listing for real? I need to check another source... Zip Realty... There it is... That is really the asking price...

(after 10 minutes to compose myself...)

I need to create a new category for this listing. What do you call a price that is even beyond WTF? This seller is clearly suffering from a kool aid overdose.

This seller is locked in a housing bubble time warp. This listing hit the market on June 24, 2006, almost the exact peak of the bubble here in Orange County. It appears to be empty, so add a year's worth of carrying costs to the investment cost. You would think after failing to sell for a whole year -- a year which saw declining home prices -- this seller might consider lowering the price a bit. Personally, I think it might be a tough sale even if the asking price were cut in half, but what do I know?

This is pure speculation on my part, but a couple of weeks ago when I profiled Turtle Ridge, there were a couple of new posters who seemed to take issue with my analysis. One of these posters has the same first name as the owner of this Turtle Rock property: Coincidence? Let's judge by the comments.

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I wish to offer special thanks to JoonB who emailed me about this property, and to squareround for the complete pricing data below:

5512 SIERRA ROJA ROAD, Irvine, CA 92603**
Price Reduced: 10/17/06 — $1,850,000 to $1,795,000
Price Reduced: 12/05/06 — $1,795,000 to $1,749,999
Price Reduced: 03/27/07 — $1,749,999 to $1,685,000
Price Reduced: 05/10/07 — $1,685,000 to $1,625,000
Price Increased: 06/27/07 — $1,625,000 to $2,100,000
Price Reduced: 06/28/07 — $2,100,000 to $1,980,000